DTN Early Word Grains
New Year's Kick Off
Due to the holiday the grain and oilseed complex was closed overnight. Markets will open at 8:30 am (CT).
CME Globex Recap:The New Year's Day holiday was filled with football (U.S. style) with most markets waiting their turn to kick-off later Tuesday morning. However, the energy complex was under light pressure overnight despite the continued weakening of the U.S. dollar. DJIA futures were showing a small gain. The metals sector was mixed early Tuesday with gold and platinum higher while copper and silver were lower.
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The Dow Jones Industrial Average closed 118.29 points (0.5%) lower at 24,719.22, the Nasdaq Composite lost 46.77 points (0.7%) to 6,903.39, and the S&P 500 fell 13.93 points (0.5%) to 2,673.61 Friday. DJIA futures were 21 points higher early Tuesday morning. Asian markets closed higher with Japan's Nikkei 225 closed for holiday, Hong Kong's Hang Seng up 596.16 points (2.0%), and China's Shanghai Composite rallying 41.15 points (1.2%). European markets were trading mostly lower with London's FTSE 100 down 34.07 points (0.4%), Germany's DAX off 95.92 points (0.7%), and France's CAC 40 down 46.34 points (0.8%). The euro gained 0.0058 to 1.2064 as the U.S. dollar index fell another 0.39 to 91.85. March 30-year T-Bonds were 14/32 lower at 152'18 while February gold added $4.30 to $1,313.60. Crude oil was $0.18 lower at $60.24 while Brent crude dipped $0.29 to $66.58. China's Dalian soybean futures were mixed while Malaysian palm oil futures were higher overnight.
| BULL | BEAR | ||
| 1) | If the soybean market is able to rally, spillover buying could support corn. | 1) | Corn's long-term fundamentals remain bearish. |
| 2) | Soybean short-term trends remain up on daily charts. | 2) | Soybeans, both futures and cash, established bearish long-term signals on monthly charts. |
| 3) | Winter wheat markets continues to show intermediate-term uptrends for both cash and new-crop futures. | 3) | If the other grains falter Tuesday, wheat will likely follow. |
The weekly Newsom on the Market column can be found on subscription sites only. On DTN Pro it is in News/Town Hall and on MyDTN in News/Columns.
MORE COMMODITY-SPECIFIC COMMENTSCORN The start of a new year finds corn in a familiar place, technically, with its minor (short-term) trends still considered up, its secondary (intermediate-term) trends still up, its major (long-term) trends down (for additional analysis on secondary and major trends, see this past weekend's Technically Speaking blog posts), and its M4 (extremely long-term) trend down on its yearly chart (for more information, see last Friday's On the Market column on DTN). Returning to short-term, March corn could see a third consecutive day down against its minor uptrend, with support on its daily chart between $3.50 1/4 and $3.48 1/4. Last Friday's close was $3.50 3/4. Fundamentally, the market will get its weekly export inspection update, though this isn't expected to turn many heads away from watching weather developments and forecasts for South America.
SOYBEANS Technically, the soybean market is a bit of a mess following last week's move to new lows. However, the nearby March contract did establish a possible buy signal on its daily chart Friday, making it possible the contract sees follow-through buying to start the new week and new year. The trend on weekly charts (secondary or intermediate-term) could best be classified as down, though seasonally the cash market tends to stabilize starting in early January. Soybeans, both cash and futures, posted bearish technical signals during December on long-term (major) monthly charts. For more analysis on weekly and monthly trends, see the latest updates in DTN's Technically Speaking blog. Meanwhile, the DTN National Soybean Index (NSI, national average cash price) continues to show an M4 (extremely long-term) bullish pattern on its yearly chart established in 2016. As with corn, soybean traders will spend much of the day looking at South American forecasts.
WHEAT The focus in winter wheat could immediately turn to new crop as the new year begins. This past week has seen bitter cold temperatures across the United States, with both the U.S. Midwest (SRW) and Southern Plains (HRW) wheat growing areas suffering along with everyone else. Throw in the fact little precipitation has been seen for months, and early questions over the health of the dormant winter wheat crop could be raised. The word "early" in the previous sentence should be emphasized, because little to nothing will be known about the crop until it breaks dormancy, usually in the spring but sometimes in the winter. July futures contracts continue to show secondary (intermediate-term) uptrends on weekly charts, as do both cash markets. Look for wheat to try and build on recent bullish technical signals, with light support tied to the continued long-term downtrend of the U.S. dollar index (for more information, see Monday's Technically Speaking blog post).
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.15 | -$0.01 | -$0.35 | Mar | $0.000 |
| Soybeans: | $8.86 | $0.06 | -$0.76 | Mar | $0.010 |
| SRW Wheat: | $3.95 | $0.00 | -$0.32 | Mar | $0.011 |
| HRW Wheat: | $3.76 | $0.01 | -$0.51 | Mar | $0.006 |
| HRS Wheat: | $5.91 | -$0.04 | -$0.23 | Mar | $0.003 |
Darin Newsom can be reached at darin.newsom@dtn.com
Darin can be followed throughout the day at www.twitter.com\DarinNewsom
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